Australia's average elevation is the lowest of any continent, with a mean elevation just exceeding 200 metres. The dominant topographical feature of the continent is the Great Dividing Range, which spans the length of the eastern seaboard and has a profound influence on regional weather patterns and land use.

Australia's agricultural landscapes support a wide range of soils. Most are ancient, strongly weathered and infertile by world standards, with deficiencies in phosphorus and nitrogen. Those on floodplains are younger and more fertile. Very few are considered good quality soils for agriculture. To offset nutrient deficiencies, superphosphate and nitrogenous fertilisers are widely used, particularly on pasture and cereal crops. Fragile soil structure and a susceptibility to waterlogging are other common features of Australian soils, while large areas are naturally affected by salt or acidity. These soil characteristics restrict particular agricultural activities, sometimes ruling out agricultural activity altogether.

With the exception of Antarctica, Australia is the world's driest continent. More than a third of the continent is effectively desert; over two thirds of the continent is classified as arid or semi-arid. The wet summer conditions of northern Australia are suited to beef cattle grazing in inland areas and the growing of sugar and tropical fruits in coastal areas. The drier summer conditions of southern Australia favour wheat and other dryland cereal farming, sheep grazing and dairy cattle (in the higher rainfall areas), as well as beef cattle. Within regions there is also a high degree of rainfall variability from year-to-year, which is most pronounced in the arid and semi-arid regions. Rainfall variability is very high by global standards and often results in lengthy periods without rain. The seasonality and variability of rainfall in Australia requires that water be stored, and 70% of stored water use (including groundwater) is accounted for by the agricultural sector. Under normal seasonal conditions, the ability of primary producers to store water ensures that there are adequate supplies of water for those agricultural activities requiring a continuous supply. The development of large scale irrigation schemes has opened up areas of inland Australia to agricultural activities which otherwise would not have been possible.

Evaporation is another important element of Australia's environment affecting agricultural production. Hot summers are accompanied by an abundance of sunlight. This combination of climatic variables leads to high rates of evaporation. Areas that have been cleared for crop and pasture production tend to coincide with areas that receive five to nine months of effective rainfall (where rainfall exceeds evaporation) each year. In areas of effective rainfall of more than nine months, generally only higher value crops or tropical crops and fruits are grown, while in areas with effective rainfall of less than five months, cropping is usually restricted to areas that are irrigated.

Since European settlement the vegetation of Australia has altered significantly. In particular, large areas of Australia's forest and woodland vegetation systems have been cleared, predominantly for agricultural activity. The areas that have been altered most are those which have been opened up to cultivation or intensive grazing. Other areas, particularly those semi-arid regions previously cleared of timber and scrub to allow extensive grazing of native grasses, now show signs of returning to their previous condition. In recent years various state and territory legislation has seen restrictions applied to the area of old growth and regrowth forest and woodland that can be cleared without a permit.